Local officials wary of "tax transparency"

Thursday

Nov 8, 2012 at 11:00 AM

By James Jordan Newton Kansan

When Gov. Sam Brownback proposed the "tax transparency bill" it got the attention of local officials.The proposal would change the way cities, counties and school boards collect taxes.Currently if the assessed valuation of property goes up, the amount of taxes collected also goes up. As a result cities or counties can keep the mill levy the same, get more money, and say to the community that they have not raised taxes. Even so, the tax payer is paying more in taxes.The governor's proposal would change the mill levy in that scenario, so the taxes paid would not go up. In that case a person’s property taxes would not go up if their valuation went up.The local entities would then have to vote to raise the mill levy - or the tax rate - if they wanted to get that extra money they had realized through growth.Newton city finance director Lunda Asmani said it would affect the cities and counties. "It would also affect the library and airport, and any other entity that receives property taxes."New improvements, or new buildings, would be exempt from this requirement.County assistant manager for finance Anthony Swartzendruber said the county would be taking a "wait and see" approach. He said the county already has to let people know if that increase reaches a certain level through an official publication notice."It depends on what ends up being in the bill. We will wait until something is written and see," he said.One local official is not opposed to the idea.Newton City Council member Jim Nickel has said before that the current system hides the fact that property taxes go up."Maybe we should be clearer on how we do our business," he said. "The mill levy system is complicated."He said he was "not really opposed" to the idea.He said he was, however, opposed to the idea of the state putting a cap on how much cities or counties could raise property tax rates."I'm not saying I want to raise taxes, but if a city wants to do that, I’m not sure the state should be interfering," he said.Asmani noted that the city has to vote twice on the budget each year. One is on the budget and one is on the mill levy, so essentially the city does this already.Another complication, Asmani said, is that the city itself does not set the mill levy. The city comes up with a budget and gives that budget to the county, and the county actually sets the mill levy, so if the proposal passes, there could be complications. Timing could also be a problem because the budget is passed in August as per state law, and the final valuation is not determined until November.Even if cities and counties have not been completely transparent, they were not hiding the money either. The additional money has been included in general fund budgets and can be seen there.The assessed valuation in Harvey County has risen, but it has also gone down.With the economic downturn in 2009, the county received $225,000 less than it had the year before, but kept the mill levy the same.Usually it goes up. In 2006 the assessed valuation went up 2.29 percent, and the city netted about $56,000 more. Since 2006 the biggest increase was in 2007 when the county received $158,477 in additional funds even as it lowered the mill levy.Those figures are minus property in the "new improvement" category.Swartzendrubber said the extra money has helped the county keep up with inflation."Even if growth is flat, the cost of commodities like gas and other things keeps going up," he said.In the city of Newton the assessed valuation has gone from $96,026,085 for the 2006 tax year, to $115,191,488 for the 2012 tax year.